Banks miss out on Scout24 fees after failed takeover

LONDON, May 14 (LPC) - Banks have dropped a €2.72bn leveraged loan financing for German online classifieds group Scout24 following a failed takeover bid, missing out on an approximate €28m fee that will further impact a depleted 2019 budget.

The takeover bid led by Hellman & Friedman and Blackstone for Scout24 did not reach the threshold of 50%of shares, the bidders on Tuesday said in a statement.

ABN Amro, Bank of America Merrill Lynch, Barclays, BNP Paribas, Credit Suisse, Goldman Sachs, Nomura and UniCredit had underwritten the senior facilities to back the acquisition that comprised a €1.87bn term loan B and a €250m revolving credit facility.

With underwriting fees at around 150bp, banks are losing out on average an approximate €3.5m fee, as the financing has fallen away.

The loss of fees will impact banks that are already struggling to hit budget in 2019 as first quarter leveraged loan volume reached at its lowest level in 10-years, according to LPC data.

Some €600m of second-lien loans had also been preplaced, the sources said.

The loan deal was due to be popular among cash-rich investors eager to put money to work in well known, well liked credits.

“It is very disappointing. The offer lapsed and there is nothing left to finance so the underwrite is gone. It was a lot of money on a name that people liked, so it is a shame for bank’s fees and a loss for investors,” a senior banker said.

It could put a dampener on German public-to-privates, which have had a tricky history, including a lengthy and complicated takeover saga of German generics drugmaker Stada.

“This is the second of a tricky round of German P2Ps – doing these deals in Germany is difficult, we’ve known that for a while. This time round they tried 50.1% and still didn’t get that which if off putting to say the least and adds to the complexity,” a senior loan investor said.

Hellman & Friedman and Blackstone bought a 70% stake in Scout24 from Deutsche Telekom for about €1.5bn in February 2014, when Deutsche Telekom retained a 30% stake.

That buyout was backed with €695m of first and second lien leveraged loans, according to LPC data. The private equity firms took it public in 2015.

Scout24 is a cluster of internet portals which includes European car trading site AutoScout24 and real estate site ImmobilienScout24. (Additional reporting by Tessa Walsh, editing by Christopher Mangham)